WebTV Founder Pitches New Game Console To Take On Wii, PS3, X360

Eric Krangel

Mar. 24, 2009, 9:48 AM

Is there room for a fourth game console on the market after the Wii, X360, and PS3?

The WSJ carries a story about entrepreneur Steve Perlman (of dot-com 1.0 WebTV fame), who has a new game console startup called OnLive. Steve already has some big game publishers like EA (ERTS), Take-Two (TTWO), and THQ (THQI) interested.

What does Steve do different in an already crowded field? Here's the nut:

Game software now runs on PCs and game consoles, which have special graphics circuitry to create fast action and realistic settings. But games on OnLive will be run on high-end servers hosted by the company, Mr. Perlman said, so they can be played on home systems without much computational power.

Though video services like YouTube already allow users to access content that is stored elsewhere, OnLive says services that allow graphics-rich fast-action games to be played from a central server remotely are not currently possible -- in large part because current technology can't provide the instantaneous two-way response time they require. Mr. Perlman said his company has worked seven years on that problem, and has solved it.

And how does Steve plan to get his beautiful pre-rendered graphics to a gamer's TV? Hardware, just like everyone else. "Televisions are expected be able to access the service by connecting to a small Internet-capable device dubbed the OnLive MicroConsole." No price on that console yet either.

Seems like a tough sale to us. Anyone who wants to buy a piece of hardware that connects to their TV on the cheap can buy a Sony (SNE) PS2, still selling well with tons of low price games. And we're expecting more downward pressure on high-end game console prices over the next year or two as well.

But with at some big players at least claiming interest, we'll be watching what Steve comes up with.